This short post is a series of [head, desk] moments from this article at The Times, where (highly credentialed) reporters Reed Abelson and Margot Sanger-Katz together with the editors exhibit about as bad a case of market fundamentalism as ever I’ve seen, but I can’t think of much more to say about it than “[head, desk]”.

Let’s start out by defining market fundamentalism. From Michael Hudson:

Market fundamentalism: The belief that the optimum common interest is only achievable through a market equilibrium resulting from individual decisions by market participants seeking to maximize their own private gains. Epitomized by Margaret Thatcher’s declaration that there is no such thing as society, its policy conclusion is that “free markets” should not be distorted by public regulations enacted in the name of the common good. Hence, it has become a synonym for rentier economy, in contrast to progressive economic policy. (See Chicago School and Deregulation.)

To the Times piece, whicn is a transcribed conversation between Reed Abelson, who “currently covers the health care business, focusing on how financial incentives affect the delivery of medical care,” and Margot Sanger-Katz, who “writes about health care for The Upshot, the Times site about politics, economics and everyday life.” The editors introduce the story this way:

News About Obamacare Has Been Bad Lately. How Bad?

Ever since passage of the Affordable Care Act, a fierce debate has been waged over whether the law would work as advertised. While advocates promised that the design of new insurance markets would transform the way consumers buy health insurance, critics warned that the new market would never succeed. Reed Abelson and Margot Sanger-Katz have had front-row seats to the debate, and the two reporters took a few minutes to discuss when — and if — the market would stabilize.

So “how the new market” is working is the essential frame for news about ObamaCare; this despite having a reporter whose beat is “everyday life,” and who hence might be expected to weigh in on how consumers citizens actually experience ObamaCare, what with its high costs, narrow networks, high co-pays and deductibles, random differences by age, jurisdiction, and income, and administrative debacles. (I’ve added links to comments at the Times with the usual harrowing stories.) But no! Since “the optimum common interest is only achievable through a market equilibrium,”[1] the central focus of the story must be, and need only be, the market.

Here are the central exchanges between Abelson and Sanger-Katz (emphasis mine throughout). This is a bit long, but you can see that at every stage, while the Times reporters occasionally evince some concern for ObamaCare users, they always return to the condition of the market. That is their chief concern.[2]

SANGER-KATZ: … It seems clear that some insurers just made pricing mistakes. I’d include a lot of the nonprofit co-op plans that have gone belly up in that category. United may fall in that category, too, in some places. That doesn’t seem to me like a permanent problem. If everyone priced too low, they can just raise their prices in future years, and it’ll be O.K. That’s not great for middle-class people who pay their own premiums, but most people in the exchanges won’t notice a difference because of the way the subsidies work.

These markets also turned out to be more complicated than some insurers expected….

ABELSON: But isn’t it a vicious cycle? The big players won’t stay in markets unless they can attract enough customers to make it worth their while. Those who say Obamacare is doomed argue that the premiums are just too high for people who don’t qualify for a subsidy. If you are insured and relatively healthy, you may not feel as if the coverage is a good deal. The deductibles are steep, meaning you end up paying for a lot of your care before you see the first dollar of coverage, and you can’t always see your choice of doctor.

The result is that the market could be too small and therefore too volatile to attract mainstream insurers like United.

How do you solve that?

SANGER-KATZ: Well, it seems clear that you need some competition in every market…

[head, desk].

… to keep prices low… I also think it’s worth looking at the states where things are going well and the insurers are making money: California, Vermont, Washington. Those state exchanges made some different regulatory choices early on that got more people into the new markets right away, so their markets stabilized more quickly. ….

ABELSON: It’s easier to smooth all of this out if you insure more people. Do you think there’s opportunity to see the market increase in size? I know insurers in the early years suffered when some states allowed people to keep their existing plans. Those plans that were grandmothered, as it is called.

SANGER-KATZ: My sense from talking to folks in the industry is that the grandmothered plans really wrecked their early calculations. The Obama administration, responding to a political freakout about people whose plans were getting canceled in 2014 [the ingrates!], let states keep them for a few more years. The result was that healthy people tended to hold onto their old, cheaper plans, while sick people went to the exchanges. You can see how that might make the exchange market unprofitable for new entrants [even if some people stayed financially stable and other people got heatlh care].

… [O]bamacare has been much less disruptive to the status quo than many people thought. But it also means that the exchange markets are smaller and probably more expensive than people thought, too. If prices keep going up, maybe they’ll never grow much. It certainly seems like everyone is cutting down their long-term estimates for exchange enrollment.

ABELSON: The other possibility would be to expand the pool of people who qualify for subsidies. Is that a political nonstarter?

Wait, what? You mean this is a problem in political economy?

SANGER-KATZ: It’s such an interesting question.

It would be even harder if you had any, er, skin in the game.

Every time I write a story about the health law, I get comments and emails from people just above the income cutoff for subsidies. These are the people who have been most hurt by the health law. Plans on the exchanges are just really expensive for them, and often come with big deductibles, too. And if premiums keep rising, they’ll keep getting squeezed. Analysts from the Urban Institute have done the math and found that some of them are paying more than 25 percent of their income on health care now. Still [nice transition], it is awfully hard to imagine Congress approving massive new spending to make Obamacare more generous.

Well, it certainly won’t get any easier to imagine after articles like this.

Hillary Clinton has some proposals about affordability, but they don’t include expanding subsidies.

ABELSON: One of the strengths of the law, and its main weakness, is its emphasis on keeping the status quo. While President Obama may have overpromised when he said you can keep your plan if you like it, the insurance isn’t radically different. The only way companies can seem to bring down prices is by narrowing networks of hospitals and doctors or hiking deductibles. While Bernie Sanders seems to be offering the most dramatic change by proposing that everyone switch to a government plan like Medicare, I’m still looking for a market response…

[head, desk].

— some real change in how care is delivered[3] that is much less expensive or at least more effective.

SANGER-KATZ: This is the thing I say whenever anyone asks me what I think about the health law. It basically baked in all of the complexity and dysfunction of the pre-existing American health care system.

SANGER-KATZ: … What will you be keeping your eyes open for to shape your thinking about how these markets will do long term?

ABELSON: We should keep watching for the exits.

But we should also look at what happens with some of the newer players, like Oscar, the for-profit company in New York that has a lot of capital. And I know that some of the big health systems — I’m thinking of another hometown player, Northwell Health, formerly North Shore-LIJ Health System — have started offering plans. Some of these systems, like Northwell, have had some success in attracting customers and think they can make a go of it.

And we should watch the Department of Justice. If it approves some of those big health insurance mergers like Anthem and Cigna and Aetna and Humana, my guess is those companies will not be leaving the marketplaces anytime soon.

At the beginning, Sanger-Katz urges market competition as the solution. Through a series of seamless transitions, we arrive at the end, where Abelson urges market concentration as the solution. Because markets.

[head, desk].

Well, that’s that. I’m sorry it was so ugly. Oh, and readers are invited to consider contextualize the reporting in terms of “Neoliberalism as Lived Experience” here. It was fascinating to watch the reporters approach the human consequences of our health care policies, and then veer away into considering the “health” of the market.

NOTES

[1] Of course, if insurance companies are minded to deny people care (as they are) and the system is complex enough to allow them to do so (as it is) then a phishing equilibrium will arise, where insurance companies scam their policy holders. This topic isn’t part of polite discourse, and so the only way to uncover it would be to, well, do some investigative reporting and collocate the common experiences of many ObamaCare buyers. Here again, market fundamentalism prevents that, a priori. No need to talk to those pesky rational agents; we need only examine the health of the market!

[2] One might argue that this was an editorial constraint, but a headline like “News About Obamacare Has Been Bad Lately. How Bad?” permits a broad variety of topics.

About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered.
To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

Only reason I can think of to not take credit cards is that they want people to default. Does that seem right?

I am in Canada, this whole US health care (actually, forced health ‘insurance’ bonanza for the ins co’s) seems utterly barbaric to me. The health insurance industry, and much of the ‘health care’ industry, will die if youse guys get Medicare for all. And they won’t ‘go gently’.

HotFlash: You’ve come to the correct conclusion. Healthcare in the US remains
a rentier investment, and as such wants its 25% profit. We don’t want a healthcare
industry; we want an equitable healthcare system, similar to many European nations.

Yes, the US system is barbaric. We have gone from a system where insurance companies refused to insure many people due to pre-existing conditions to one where patients cannot refuse to buy these awful policies.

The winners and losers are an interesting study in political power in the US.

Winners: Insurance companies, the health industry, and to a lesser extent older upper middle class small business people who can get guaranteed coverage at a reduced rate due to cross-generational subsidy. The totally poor get Medicaid outside the whole system.

Losers: Working class and lower middle class patients who don’t work for a large employer, and hence must purchase one of those policies. They probably only had a limited health care budget before ObamaCare, and are now forced to spend it or more before they get a single doctors visit. They can now probably not afford to go to the doctor, much less pay the copays and deductibles. If they do try to use their insurance, they face limited networks that probably don’t include their regular doctors.

This plan was designed by the upper middle class professionals who have employer coverage, and hence don’t need to sign up for it.

The credit card is likely because they don’t want to pay the process fee (usually 2-3% – which in your case would be $48-72) By paying by check / direct withdrawal they save. Fundamentally its cost containment and frankly a pretty good policy. Of course they could have more nefarious reasons I suppose, but I have been in the industry in the past and that is indeed the direct reason for the policy.

They may also have been hit by significant amounts of chargebacks which the card issuers may have upheld because — shock ! horror ! — BCBS could have become irredeemably crapified and bungled its claim handling operations so awfully that the cardholders were patently entitled to the refunds they sought.

That’s my take. When you place a purchase on a credit card, and then you get screwed by the merchant, the card company can, and will, intervene on your behalf. On one occasion, I only had to use the threat of asking my credit card company to intervene in order to receive what I had paid for.

I hope no one considers paying by check for two reasons. One is that the USPS may not deliver it on time. Also, the insurance company can say it arrived late if they want to cancel your insurance. Be very careful. And I am a person who still likes to pay by check.

So the decision to let people keep cancelled plans in 2014 was based on the political impact of their “freakout”, not on their actual immediate needs. Economist like to regard the (long) burgeoning reactions to wage stagnation, infrastructure decay, etc, as “political”, rather than human, phenomena. In which context they are inclined to suggest political, not human, solutions. Launch a policy, twiddle a regulation, rebalance the responsibilities, in order to kick the cans of consequences down the road… where markets will fix them, or just make them go away, poof.

“If you can’t afford the good food or if you can’t afford health care or if you don’t have a job or if your car is dangerous because you can’t get it fixed and you DIE, you just lost the game-bzzzzz-thanks for playing extreme capitalism.”
Marc Maron, Attempting Normal

Source? That would be ~300 million per year (or ~$250 million if you are being a little deceptive and not counting all days). Again, insane pay regardless, but doubt the figure is that high.. but happy to be proved wrong if you have a link!

And we should watch the Department of Justice. If it approves some of those big health insurance mergers like Anthem and Cigna and Aetna and Humana, my guess is those companies will not be leaving the marketplaces anytime soon.

So, once they are big enough to monopolize and game the market place, once they become too big to fail, then the (wealth extraction) system will finally start to work. Hell, I thought they were doing a fine job of wealth extraction all this time.

It basically baked in all of the complexity and dysfunction of the pre-existing American health care system.

That is a pretty good line though. I assume the use of ‘pre-existing’ to frame the American health care system as a disease is either a tell for connoisseurs of snark, or a deliciously revealing Freudian slip.

The Democrats could pass backup Medicare for all using budget reconciliation if they ever again control both houses of Congress. For that reason, you can be sure they will keep throwing elections for the foreseeable future.

It’s unbelievable to have an admission like, “It basically baked in all of the complexity and dysfunction of the pre-existing American health care system” followed by advocacy for more of the same.

In the context of your piece, “Neoliberalism as Lived Experience” have humans become so accustomed to separate the self from the other, to separate causes from effects and to isolate intentions away from evaluations of consequences that agency is not a question? Even in the dialogue about single payer, the fact that it delivers improved healthcare outcomes is the most frequently dropped or neglected talking point. Even there, the WHY of the thing is being lost.

What will it take to turn off auto-pilot? The financial economy has been divorced from the physical economy. The mind is just as easily divorced from the material world. Technology is adding another layer of buffers. Perhaps the question of agency, while often a topic in this forum, is more important than is recognized by the wider community.

Anyone who is allowed by a newspaper to write articles about health insurance should be required to disclose the type of insurance s/he receives and the amount s/he would be paying if required to purchase a policy under Obamacare. I’d like to see for myself just how truly out-of-touch most of these reporters are.

and the amount s/he would be paying if required to purchase a policy under Obamacare.

Many employer based plans do not have a counterpart in the Affordable Care Act world of subsidized plans. Unless you have income that is well under say 170% of food stamp level income, the ACA plans start to be really not Affordable as one moves up the income chain. A person can’t buy plans on the marketplace (exchanges) that would even come close to those employer based plans. So people who might have similar plans to what NYT writers get (low or no out of pocket costs and no cost sharing on all benefits) would be right at the food stamp eligibility minimum-as poor as the proverbial cloister mouse. Ironic, no?

FWIW…my own personal experience (obtaining coverage through Covered California; subsidized Blue Cross/Blue Shield “silver” health plan, same as last year): my premiums went up 24% from last year — even though I haven’t even visited a doctor in more than three years.

So, IMO, that statement “If everyone priced too low, they can just raise their prices in future years, and it’ll be O.K…most people in the exchanges won’t notice a difference because of the way the subsidies work” is BS. Sure, it’s not huge difference overall, YOY (since the plan is heavily subsidized)…but I can assure you that a few more years of 20+% increases will definitely be “noticed”.

Because Single Payer, effective single payer such as Medicare, demolishes for all time any notion of the dogma “The Private Sector Does It Better.”

What we are having is not a economic discussion.

First there is the direct fear of loss: We are having a discussion where 6% to 14% of the people in the US are scared of loosing either their jobs (health insurance professionals), their bonuses (their management), or their excessive incomes (The Doctors).

Second there is the Higher Education fear of loss — the higher education sector will be eviscerated over education charges, and more University Presidents will loose excessive salaries, and many administrative jobs running the hedge funds which have attached universities will be eliminated.

Third, there is a large group of rentiers, or their paid servants, who support the dogma “the private sector can do it better,” because that’s either their current cash flow or their future growth, because they will loos money. Destroying the “Private Sector Dogma” dogma threatens all those who suck at the US Government’s t… whatever. That group includes most, if not all, our our beloved elected officials.

Single payer is a revolution in the US’ culture. Those who loose from single payer, including Hilarity and her Wall St friends, will fight their loss with all their might, because after the health system scam, the citizenry will focus on the next target, such as the Higher Education System scam, followed or accompanied by the Military Industrial Complex scam.

Overall I’d estimate that 50% of the GDP is at risk. By that I do not mean that it will disappear, those who are being made rich potentially loose, and have to get a real job at Mickey Dees.

The thing is written like business journalism in the “Investing” section. Whatever – the NY Times is a propaganda organ for the status quo and it does a very good job at it, employing scores of the most skilled rhetoricians and sophists. Thanks, Lambert, for taking the time to demolish the Pharisees’ and the Sadducees’ arguments for the snow job they are.

Someone might have asked about Howard Dean, who is employed by a health insurance lobbyist (sorry, i didn’t know I’d had this tab open for so long…

But when I was doing our taxes, I was forced to pay a bit of attention to TWO missives I’d received from the dept of HHS advising me’ that in essence, I’d need to fill out form Whatever to fine myself for never having purchased ObamaDontCare. Never mind that I haven’t been to a doctor for a couple decades, never mind that I’d choose death over ever going to a doc or hospital ever again...but the Instructions for whatever form were so arcane and beyond my ken…I stuck in a cover letter to ask the IRS just to go ahead and fine me. Yes, how exceptional being forced into buying ‘bronze’ or whatever…unwanted health insurance is.

Reading these stories of increased premiums and deductibles, narrow networks, preferred payment methods, etc. has been very instructive for me. There aren’t many from people who remain uninsured. I filed form 8965 to take the exemption from the healthcare penalty **cough** ‘responsibility’ fine because the quoted premiums would have exceeded 8.05% of MAGI. I have monthly healthcare costs I pay directly, but I’d be homeless if I had to buy insurance as a means to that end. Being that today is tax day, I don’t expect to see 2015 figures for awhile, but how many people qualified for this exemption from one year to the next? Also, when people say they are spending 25% of their income on insurance, what reasons do people cite for buying it?

I actually have a very good plan that is employer-sponsored and self-funded. If I didn’t I would have to go on Medicare which I am dreading the day. But your solution resonates with me. I’m one of the millions, that is permanently disabled from overtreatment. It is extremely dangerous to go to the doctor or to a hospital. I live with the consequences of trusting a predatory system that puts profits before people.

The ACA was intended to wake Americans up to the bloated cost of health care and it is working. The entire medical complex is failing and their arrogance will ensure it happens at an accelerated pace. It can’t happen fast enough for me.

It’s rigged; its all rigged. So, why is the majority participating, enabling the, “elites, ” with each peer pressure group blaming its opposite, while their leaders make out like bandits, while they all target the working people, which, surprise, surprise, are nowhere to be found, leaving nothing but debt on sunk cost RE control, as the basis of crony capitalism, socialism, pick your ism

I heard the amount of Obamacare monthly premium is determined chiefly by both income and residence zip code. When someone has the exact same income as the federal poverty line income, he would still need to pay more if he lives in a well-to-do area. I met a fellow who told me his moving the “permanent address” to a poverty zip code has saved him big time and his regular “residence” is his RV always parked somewhere in a national park or national forest.

This is why I despise the massively dysfunctional U.S. privatized health insurance system:

A while ago I was laid off from my job. Thus I no longer could afford the no-frills BC-BS plan I had. Although it did not even cover a dental cleaning my premium was almost $800 per month, plus deductibles and co-pays. So I was forced into the hellish state Obamacare website. Fortunately I was so poor that I ended up in state Medicaid.

Now I am going to the same doctors whose visits formerly cost me — after the $800 monthky premium — a minimum $50 co-pay, plus deductible charges (usually equivalent to about 30 percent of the bill), without any co-pay or deductible. I thank the gods every day it has worked out this way because I have complex medical issues that require treatment I otherwise would not seek because4 I simply would not be able to afford it otherwise.

Nonetheless one specialist is under such productivity pressure from the numerous private insurers he deals with that, on my most recent visit, he renewed a prescription for me in the wrong dosage. I did not realize this until I had paid for it at the pharmacy and had arrived home. I had to call his office back and have him re-renew the Rx in the correct dosage.

So I returned to the (Walgreens) phanrmacy. I said to the pharmacist, “Look, this clearly was an error. I’d like to obtain a refund or credit for this prescription.”

She replied, “Sorry. We don’t allow refunds or exchanges after a sale of medication.”

“But this was a prescribing error — fortunately noticed by me — that I am being asked to pay for.”

She looked at the bottle containing the incorrect dose. “Look, with your insurance that prescription only cost $4.00.”

Very true — thanks to not-for-profit, single-payer, state Medicaid. But also, very beside the point. I am the victim, here. Between the private insurer processing my Medicaid claim for the state, the doctor, the pharmacist, and I, it is easy to discern who bears the least responsibility for this medical error. In a privatized, for-profit health insurance system designed solely to maximize rent-seeking, however, the party who bears the sosts also is the patient.

I gave up. “Can I at least return this wrong prescription to you for disposal?” I asked.

She said, “We never take medications back after they are sold.”

I looked at her. “But it is the wrong dosage. What am I supposed to do with it?”

In plain English, you wouldn’t be hassling me if you were that much sicker. Welcome to the U.S. health care industry, the only enterprise in which the customer is always wrong.

God forbid this horribly dysfunctional, cold-blooded, for-profit health care system should acknowledge an error. No better that Walgreens should retain its darn nickel of profit at the risk of a patient mistakenly taking the wrong dose due to an Rx error.

I constantly ask myself what it will take for Americans to hit the damn streets in favor of a not-for-profit, everybody in and nobody out, Medicare For All health care syatem. I guess each of us will have to wait for the light bulb to flicker on as the result of an incident such as this.